Conference Call on Half-yearly Report 2018

Hannover, 9 August 2018

Satisfactory half-year performance driven by strong U/W results EBIT increase of +13.5% outperforms NPE growth

GWP	in m.	NPE	in m.	EBIT	in m.	Group net income	in m.
8,998 +11.0%	9,985	7,533	8,346 +10.8%	799 +13.5%	907	535	555 +3.8%
1H/2017	1H/2018	1H/2017	1H/2018	1H/2017	1H/2018	1H/2017	1H/2018
single large P&C transactions	F/x-adj.: +18.1%; boosted by		F/x-adjusted: +17.9%			Supported by strong underwriting result from both business groups and above-target investment return
	Return on Equity			Book value per share		Solvency II ratio
	13.2% Well above minimum target of ≥ 9.5%			EUR 69.00 -2.4%: payment of dividend in Q2		31.03.2018: 256%
P&C R/I		EBIT: 689 m.	L&H R/I	EBIT: 219 m.		Investments	NII: 744 m.
 	Very satisfying EBIT margin (13.3%) supported by favourable underwriting result (C/R of 95.7%) Strong premium growth (f/x-adj. +27.6%) driven by new business in Structured R/I and worldwide treaty		Strong EBIT growth (+32.8%)  than expected  line with expectations	showing good underlying profitability as losses from legacy US mortality business were significantly lower Premium growth (f/x-adj. +3.7%) in	RoI RoI  (≥2.7%)  	from AuM: significantly exceeds target Stable ordinary investment income Assets under own Management (AuM): +2.1%	3.1%

Figures in EUR

Favourable development in both business groups

Group figures in m. EUR	Q2/2017	Q2/2018	Δ	1H/2017	1H/2018	Δ
Gross written premium	4,451	4,640	+4.3%	8,998	9,985	+11.0%
Net premium earned	3,795	4,346	+14.5%	7,533	8,346	+10.8%
Net underwriting result	(55)	63	-	(79)	101	-
- Incl. funds withheld	(5)	119	-	45	214	-
Net investment income	387	352	-8.9%	779	744	-4.6%
- From assets under own mgmt.	336	297	-11.6%	656	630	-4.0%
- From funds withheld	50	55	+9.1%	123	114	-7.8%
Other income and expenses	68	58	-15.5%	99	63	-36.1%
Operating profit/loss (EBIT)	400	473	+18.5%	799	907	+13.5%
Long-term debt and notes payable	(18)	(20)	+10.2%	(36)	(38)	+5.2%
Net income before taxes	381	453	+18.9%	764	870	+13.9%
Taxes	(94)	(157)	+66.6%	(190)	(273)	+44.0%
Net income	287	297	+3.3%	574	596	+3.9%
- Non-controlling interests	17	15	-13.1%	39	41	+5.5%
Group net income	270	282	+4.3%	535	555	+3.8%
Retention	90.9%	91.4%		90.3%	91.3%
EBIT margin (EBIT/Net premium earned)	10.5%	10.9%		10.6%	10.9%
Tax ratio	24.6%	34.5%		24.9%	31.4%
Earnings per share (in EUR)	2.24	2.34		4.44	4.60

Continued positive operating cash flow AuM +2.1%; strengthening of USD offsets decrease in valuation reserves

Shareholders' equity strong despite dividend payment in Q2

High profitability supported by increased U/W result (+37.4%) Remarkable growth mainly from tailor-made structured R/I

Property & Casualty R/I in m. EUR	Q2/2017	Q2/2018	1H/2017	1H/2018	YTD
Gross written premium	2,613	2,888	5,427	6,467	GWP f/x adjusted +27.6%, mainly from structured  R/I; diversified growth in other areas
Net premium earned	2,147	2,750	4,313	5,175	NPE f/x adjusted +28.4% 
Net underwriting result incl. funds withheld	55	121	151	221	Major losses of EUR 93 m. (1.8% of NPE) well  below budget of EUR 351 m.
Combined ratio incl. interest on funds withheld	97.4%	95.6%	96.5%	95.7%	Unchanged reserving policy should lead to stable  confidence level, run off without extraordinary effects
Net investment income from assets under own management	235	227	474	487	Satisfactory ordinary investment income 
Other income and expenses	34	2	10	(19)	Other income and expenses lower due to less  positive currency effects
Operating profit/loss (EBIT)	324	350	634	689	EBIT margin of 13.3% well above target 
Tax ratio	24.3%	38.5%	24.5%	31.0%	Tax ratio higher principally due to tax-reduced  disposal gains and dividends in previous year
Group net income	229	200	444	434
Earnings per share (in EUR)	1.90	1.66	3.68	3.60

Major losses well below budget for 1H/2018 Remaining unused large loss budget of EUR ~700 m. for the year

672 291 863 1,730 ⁶⁶² ⁷²⁴ ⁵⁵⁹ 714 846 1,790 135 458 240 662 981 478 578 426 573 627 1,127 93 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H/2018 Gross Net Expected large losses (net) Natural and man-made catastrophe losses* in m. EUR Natural and man-made catastrophe losses in % of Property & Casualty premium 13% 5 % 14% 25% 9 % 9 % 7 % 8 % 9 % 17% 2 % 11% 5 % 12% 16% 7 % 8 % 6 % 7 % 8 % 12% 2 % Expected large losses (net) in m. EUR 428 450 500 530 560 625 670 690 825 825 825

* Up to 2011 claims over EUR 5 m. gross, from 2012 onwards claims over EUR 10 m. gross

Overall very benign large loss experience in 1H/2018

Catastrophe losses* in m. EUR Date		Gross	Net
Storm "Friederike", Europe	17 - 18 Jan	48.1	31.1
Earthquake, Papua New Guinea	25 - 26 Feb	17.3	11.2
2 Natural catastrophes		65.4	42.4
2 Property claims		44.6	26.3
1 Credit claim		24.7	24.7
5 Major losses		134.8	93.3

* Natural catastrophes and other major losses in excess of EUR 10 m. gross

Overall profitability above cost of capital

	1H/2018: Combined Ratio vs. MtCR			EBIT margin
Target	North America*	99.7%		16.1%
markets	Continental Europe*	93.3%		16.8%
	Marine	62.4%		50.2%
	Aviation	93.1%		19.5%
Specialty lines worldwide	Credit, surety and political risks	88.6%		18.6%
	UK, Ireland, London market and direct	111.3%		0.6%
	Facultative R/I	98.3%		10.6%
	Worldwide Treaty* R/I	95.2%		12.9%
Global R/I	Cat XL	40.8%		76.5%
	Structured R/I and ILS	97.5%		5.5%
Total		95.7%		13.3%
	0%	20% 40% 60%	80% 100% 120%	140% 160%

MtCR = Maximum tolerable Combined Ratio Combined Ratio

* All lines of Property & Casualty reinsurance except those stated separately

Strong EBIT growth of 32.8% Overall good profitability; US mortality results better than expected

Life & Health R/I in m. EUR	Q2/2017	Q2/2018	1H/2017	1H/2018	YTD
Gross written premium	1,838	1,752	3,570	3,518	GWP f/x-adjusted +3.7%, mainly supported by  UK longevity business
Net premium earned	1,648	1,596	3,220	3,171	NPE f/x-adjusted growth +3.8% 
Net underwriting result incl. funds withheld	(60)	(3)	(106)	(7)	Improved technical result driven by better  experience in morbidity and US mortality
Net investment income from assets under own management	100	70	180	142	Favourable ordinary investment income 
Other income and expenses	36	57	91	84	Unchanged strong contribution from deposit  accounted treaties (1H/2018: EUR 93 m.)
Operating profit/loss (EBIT)	75	123	165	219	Targeted EBIT growth of 5% achieved 
EBIT margin	4.6%	7.7%	5.1%	6.9%	Tax ratio above long-term average due to  changes in business set-up linked to the US
Tax ratio	28.6%	23.1%	28.5%	33.1%	tax reform in Q1/2018, expected to decrease in the course of the year
Group net income	54	96	114	147
Earnings per share (in EUR)	0.44	0.79	0.95	1.22

Alternative investment classes ensure income above target Unrealised gains lower due to higher interest rates and credit spreads

in m. EUR	Q2/2017	Q2/2018	1H/2017	1H/2018	RoI
Ordinary investment income*	317	317	641	634	3.1%
Realised gains/losses	59	5	83	53	0.3%
Impairments/appreciations & depreciations	(12)	(10)	(23)	(21)	-0.1%
Change in fair value of financial instruments (through P&L)	(0)	14	11	20	0.1%
Investment expenses	(28)	(28)	(56)	(56)	-0.3%
NII from assets under own mgmt.	336	297	656	630	3.1%
NII from funds withheld	50	55	123	114
Total net investment income	387	352	779	744
Unrealised gains/losses of investments	31 Dec 17	30 Jun 18

	31 Dec 17	30 Jun 18
On-balance sheet	1,159	692
thereof Fixed income AFS	706	290
Off-balance sheet	489	495
thereof Fixed income HTM, L&R	315	282
Total	1,648	1,187

Stable ordinary income; Private equity and Real estate compensate for lack of dividends from liquidated portfolio of listed equities
Realised gains impacted by rise in USD yields
Minor impairments only on private equities, major portion still from depreciation on direct real estate holdings
Decrease in valuation reserves due to higher interest rates as well as increasing credit spreads

* Incl. results from associated companies

Ordinary income stabilised by Private Equity and Real estate ... ... reflected in high share of income relative to asset allocation

Asset allocation

Investment category	30 Jun 18
Fixed-income securities	88%
- Governments	35%
- Semi-governments	16%
- Corporates	30%
Investment grade	26%
Non-investment grade	4%
- Pfandbriefe, Covered Bonds, ABS	8%
Equities	2%
- Listed Equity	<1%
- Private Equity	2%
Real estate/real estate funds	5%
Others	1%
Short-term investments & cash	3%
Total market values in bn. EUR	41.4

Economic view based on market values as at 30 June 2018 * Before real estate-specific costs

Target Matrix 2018

Business group	Key figures	Strategic targets for 2018	1H/2018
Group	Return on investment1)	≥ 2.7%	3.1%
	Return on equity2)	≥ 9.5%	13.2%
	Earnings per share growth (y-o-y)	≥ 5%	3.8%
	Economic value creation3)	≥ 6.5%	n.a.
	Solvency ratio4)	≥ 200%	256.0%
Property & Casualty R/I	Gross premium growth5)	3% - 5%	27.6%
	Combined ratio6)	≤ 96%	95.7%
	EBIT margin7)	≥ 10%	13.3%
	xRoCA8)	≥ 2%	n.a.
Life & Health R/I	Gross premium growth9)	3% - 5%	3.7%
	Value of New Business (VNB)10)	≥ EUR 220 m.	n.a.
	EBIT growth	≥ 5%	32.8%
	xRoCA8)	≥ 2%	n.a.

5-year average return of 10-year German government bonds 5) On average throughout the R/I cycle; at constant f/x rates

6) Incl. expected net major losses 7) EBIT/net premium earned

10) Based on Solvency II principles and pre-tax reporting

1) Excl. effects from ModCo derivatives 2) After tax; target: 900 bps above 5-year average return of 10-year German government bonds

3) Growth in economic equity + paid dividend; target: 600 bps above 4) According to our internal capital model and Solvency II requirements; as of 31 March 2018

8) Excess return on allocated economic capital 9) Organic growth only; annual average growth (5-year period), at constant f/x rates

Outlook

16% premium growth derived from various markets Property & Casualty treaty renewals: 2 April - 1 July 2018

Underwriting year figures at unchanged f/x rates (31 December 2017)

Overall premium increase in North America Treaty Department of ~15% due to further development of partnerships
Positive developments in MedMal and Caribbean accounts
Price increases on Property Cat. XLs have stalled, Risk XLs flat
Casualty pricing is not fully reflecting the continued loss emergence
Australia: Doubling of premium due to partnership deals
Favourable development in Australia resulted in premium growth with moderately better expected underlying profitability
Global Cat: Premium grew by 6%
HR continues to benefit from good showing and favourable signings
Caribbean: Rate improvements between +10% to +40% (Puerto Rico +30% / +10% for the non-loss impacted programs)
Abundance of capacity mitigated anticipated rate increases for loss impacted programs and led to "flat" renewals for non-loss impacted programs volume
Latin America: Continued all-time high in showing of R/I offers
Significant growth in new business

Overall profitability above margin requirements Good growth opportunities in several lines of business

	Lines of business	Profitability2)
Target	North America3)	+
markets	Continental Europe3)	+
	Marine	+/-
	Aviation	-
Specialty lines	Credit, surety and political risks	+
worldwide	UK, Ireland, London market and direct	+/-
	Facultative reinsurance	+/-
	Worldwide treaty3) reinsurance	+/-
Global reinsurance	Cat XL	+/-
	Structured reinsurance and ILS	+/-

1) In EUR, development in original currencies can be different

2) ++ = well above CoC; + = above CoC; +/- = CoC earned; - = below Cost of Capital (CoC)

3) All lines of business except those stated separately

Good underlying profitability in L&H

2H/2018 will be affected by in-force management actions in US mortality business

	Reporting categories	Profitability2)
Financial solutions	Financial solutions	++
	Longevity	+/-
Risk solutions	Mortality	-
	Morbidity	+/-

1) In EUR; development in original currencies can be different

2) ++ = well above CoC; + = above CoC; +/- = CoC earned; - = below Cost of Capital (CoC)

Guidance for 2018 Dividend payout ratio increased

Hannover Re Group

Gross written premium1) more than 10% growth
Return on investment2) 3) at least 2.7%
Group net income2) more than EUR 1 bn.
Dividend payout ratio4) 35% 45% (If comfortable level of capitalisation remains unchanged, this ratio will increase through payment of another special dividend)
2) Subject to no major distortions in capital markets and/or major losses in 2018 not exceeding the large loss budget of EUR 825 m.
3) Excluding effects from ModCo derivatives
4) Relative to group net income according to IFRS

¹⁾ At unchanged f/x rates

Rationale for our short- and medium-term outlook

Improved rates should support C/R target ≤ 96% without the need to significantly reduce confidence level of the loss reserves
Strong market position and financial strength enable us to outgrow the market

P&C reinsurance L&H reinsurance Investments

Attractive earnings contribution particularly from US Financial solutions business
2018 EBIT will be negatively impacted by recaptures of US mortality treaties in response to announced rate increases
Above-target VNB development and inforce management are the basis for IFRS profit growth from 2019 onwards
Normalised ordinary investment income expected at absolute level on average of past 5 years
Medium-term growth expected due to increase in AuM supported by positive cash flow and increasing reinvestment yields

Increasing profits (EBIT) in the medium term a low yield environment Positioned to outperform

Stable Return on Investment in

Appendix

Our strategic business groups at a glance 1H/2018 vs. 1H/2017

	Property & Casualty R/I		Life & Health R/I			Total
in m. EUR	1H/2017	1H/2018	Δ	1H/2017	1H/2018	Δ	1H/2017	1H/2018	Δ
Gross written premium	5,427	6,467	+19.2%	3,570	3,518	-1.5%	8,998	9,985	+11.0%
Net premium earned	4,313	5,175	+20.0%	3,220	3,171	-1.5%	7,533	8,346	+10.8%
Net underwriting result	149	205	+37.4%	(228)	(104)	-54.3%	(79)	101	-
Net underwritung result incl. funds withheld	151	221	+46.5%	(106)	(7)	-93.7%	45	214	-
Net investment income	476	503	+5.8%	302	239	-20.8%	779	744	-4.6%
From assets under own management	474	487	+2.7%	180	142	-21.4%	656	630	-4.0%
From funds withheld	2	16	-	122	98	-19.8%	123	114	-7.8%
Other income and expenses	10	(19)	-	91	84	-7.7%	99	63	-36.1%
Operating profit/loss (EBIT)	634	689	+8.6%	165	219	+32.8%	799	907	+13.5%
Long-term debt and notes payable	0	0	-	(0)	0	-	(36)	(38)	+5.2%
Net income before taxes	634	689	+8.6%	165	219	+32.8%	764	870	+13.9%
Taxes	(155)	(213)	+37.2%	(47)	(73)	+54.4%	(190)	(273)	+44.0%
Net income	479	475	-0.7%	118	147	+24.2%	574	596	+3.9%
Non-controlling interest	35	41	+17.6%	4	(0)	-100.7%	39	41	+5.5%
Group net income	444	434	-2.1%	114	147	+28.5%	535	555	+3.8%
Retention	89.4%	91.4%		91.6%	91.2%		90.3%	91.3%
Combined ratio (incl. interest on funds withheld)	96.5%	95.7%		103.3%	100.2%		99.4%	97.4%
EBIT margin (EBIT / Net premium earned)	14.7%	13.3%		5.1%	6.9%		10.6%	10.9%
Tax ratio	24.5%	31.0%		28.5%	33.1%		24.9%	31.4%
Earnings per share (in EUR)	3.68	3.60		0.95	1.22		4.44	4.60

Our strategic business groups at a glance Q2/2018 vs. Q2/2017

	Property & Casualty R/I		Life & Health R/I			Total
in m. EUR	Q2/2017	Q2/2018	Δ	Q2/2017	Q2/2018	Δ	Q2/2017	Q2/2018	Δ
Gross written premium	2,613	2,888	+10.5%	1,838	1,752	-4.7%	4,451	4,640	+4.3%
Net premium earned	2,147	2,750	+28.1%	1,648	1,596	-3.1%	3,795	4,346	+14.5%
Net underwriting result	58	113	+93.6%	(114)	(49)	-56.6%	(55)	63	-
Net underwritung result incl. funds withheld	55	121	+120.6%	(60)	(3)	-95.4%	(5)	119	-
Net investment income	232	235	+1.2%	153	116	-24.2%	387	352	-8.9%
From assets under own management	235	227	-3.8%	100	70	-30.1%	336	297	-11.6%
From funds withheld	(3)	8	-	54	47	-13.2%	50	55	+9.1%
Other income and expenses	34	2	-94.2%	36	57	+57.7%	68	58	-15.5%
Operating profit/loss (EBIT)	324	350	+7.8%	75	123	+63.6%	400	473	+18.5%
Long-term debt and notes payable	(0)	0	-	(0)	0	-	(18)	(20)	+10.2%
Net income before taxes	324	350	+7.8%	75	123	+63.6%	381	453	+18.9%
Taxes	(79)	(135)	+70.5%	(22)	(29)	+32.3%	(94)	(157)	+66.6%
Net income	246	215	-12.3%	54	95	+76.2%	287	297	+3.3%
Non-controlling interest	17	16	-7.1%	0	(1)	-	17	15	-13.1%
Group net income	229	200	-12.7%	54	96	+78.5%	270	282	+4.3%
Retention	90.3%	91.3%		91.8%	91.7%		90.9%	91.4%
Combined ratio (incl. interest on funds withheld)	97.4%	95.6%		103.6%	100.2%		100.1%	97.3%
EBIT margin (EBIT / Net premium earned)	15.1%	12.7%		4.6%	7.7%		10.5%	10.9%
Tax ratio	24.3%	38.5%		28.6%	23.1%		24.6%	34.5%
Earnings per share (in EUR)	1.90	1.66		0.44	0.79		2.24	2.34

Slight risk reduction ... ... reflected at government bonds and corporates

Asset allocation1)

Investment category	2014	2015	2016	2017	30 Jun 18
Fixed-income securities	90%	87%	87%	87%	88%
- Governments	21%	26%	28%	30%	35%
- Semi-governments	19%	17%	18%	17%	16%
- Corporates	36%	34%	33%	32%	30%
Investment grade	33%	30%	28%	27%	26%
Non-investment grade	3%	4%	4%	5%	4%
- Pfandbriefe, Covered bonds, ABS	14%	10%	9%	8%	2) 8%
Equities	2%	3%	4%	2%	2%
- Listed equity	<1%	1%	2%	<1%	<1%
- Private equity	2%	2%	2%	2%	2%
Real estate/real estate funds	4%	4%	5%	5%	5%
Others	1%	1%	1%	1%	1%
Short-term investments & cash	4%	5%	4%	4%	3%
Total market values in bn. EUR	36.8	39.8	42.3	40.5	41.4

1) Economic view based on market values without outstanding commitments for Private Equity and Alternative Real Estate as well as fixed-income investments

of EUR 1,385.3 m. (EUR 1,201.9 m.) as at 30 June 2018

2) Of which Pfandbriefe and Covered Bonds = 73.6%

Stress tests on assets under own management Unchanged focus on yields and credit spreads; reduced relevance of equities

Portfolio	Scenario	Change in market value in m. EUR	Change in OCI before tax in m. EUR
	-10%	-86	-86
Equity (listed and private equity)	-20%	-171	-171
	+50 bps	-882	-805
Fixed-income securities	+100 bps	-1,719	-1,568
Credit spreads	+50%	-693	-664

Fixed-income book well balanced Geographical allocation mainly in accordance with our business diversification

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	Governments	Semi governments	Corporates	Pfandbriefe, Covered bonds, ABS	Short-term investments, cash	Total
AAA	78.1%	61.0%	1.2%	62.8%	-	48.7%
A A	12.7%	26.2%	14.4%	20.8%	-	16.4%
A	5.4%	5.7%	33.9%	9.7%	-	15.1%
BBB	2.0%	1.5%	42.9%	5.0%	-	15.4%
<bbb< td="">	1.8%	5.5%	7.7%	1.8%	-	4.4%	1.8%	5.5%	7.7%	1.8%	-	4.4%
Total	100.0%	100.0%	100.0%	100.0%	-	100.0%
Germany	16.8%	45.3%	4.2%	22.1%	18.9%	18.4%
UK	7.7%	2.5%	8.2%	10.6%	7.5%	7.2%
France	1.1%	1.3%	7.8%	5.9%	0.8%	3.6%
GIIPS	0.9%	1.1%	4.2%	5.2%	0.0%	2.3%
Rest of Europe	2.2%	12.5%	15.2%	20.4%	3.5%	9.6%
USA	56.0%	9.2%	34.3%	12.7%	14.3%	35.8%
Australia	3.6%	9.8%	8.8%	11.0%	7.5%	7.1%
Asia	7.7%	7.0%	5.7%	0.7%	31.8%	7.3%
Rest of World	4.0%	11.5%	11.7%	11.3%	15.7%	8.8%
Total	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
Total b/s values in m. EUR	14,412	6,511	11,514	3,071	1,407	36,915

IFRS figures as at 30 June 2018

Currency allocation matches liability profile of balance sheet Duration-neutral strategy applied

Currency split of investments

Modified duration of fixedincome mainly congruent with liabilities
GBP's higher modified duration predominantly due to life business

Modified duration

2017	4.8
2016	5.0
2015	4.4
2014	4.6
2013	4.4
2012	4.5

Modified duration as at 30 June 2018: 4.9

Low allocation in Southern Europe and Ireland* Hardly 0.5 % of assets under own management

Asset allocation in m. EUR

Economic view based on market values as at 30 June 2018 * Governments and Semi-Governments

Solvency II ratio (regulatory view) Hannover Re Group

Development of the Solvency II ratio (regulatory view)

Disclaimer

This presentation does not address the investment objectives or financial situation of any particular person or legal entity. Investors should seek independent professional advice and perform their own analysis regarding the appropriateness of investing in any of our securities.

While Hannover Re has endeavoured to include in this presentation information it believes to be reliable, complete and up-to-date, the company does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such information.

Some of the statements in this presentation may be forward-looking statements or statements of future expectations based on currently available information. Such statements naturally are subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements.

This presentation serves information purposes only and does not constitute or form part of an offer or solicitation to acquire, subscribe to or dispose of, any of the securities of Hannover Re.

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